City's lack of quality low-income housing leaves few options for working poor

Created 03/06/2011 - 10:05pm

First came the thunderous boom, then what sounded like a marble bouncing on a steel drum. Tashia Harrington ran downstairs thinking someone might be in her house. It was midnight. Another boom. Then another. Glass crashed. Dishes exploded. When Harrington got to her front room, it was the Fourth of July: Sparks everywhere. Drywall bursting with each boom. The smell of sulfur hanging in the air.

Someone was shooting into Harrington’s apartment. That steel drum sound? A bullet smacking the open lid of a washing machine and tumbling down into the empty drum.

Harrington crawled upstairs, terrified, snatching up her four stunned children. Shattered glass littered 11-year-old Kanacia’s bed, which sat under a window. Harrington pulled the four girls and herself into her bedroom closet and called 911.

Harrington heard from neighbors that gangs eyeing a kid next door likely got the wrong address. Metro police still haven’t found a shooter and believe Harrington was a mistaken target. That night, Sept. 20, Harrington packed up her kids and her things, and made a promise.

“We will not spend another night in this house,” she said. She took her family to the Salvation Army the next day — in tears. Two weeks earlier, she’d thought the clean townhouse in Madison — for $675 a month — was a dream.

Being a single mother to four daughters demands a calloused resiliency. Shrinking paychecks in the last few years have backed Harrington into an eviction and left many unpaid bills. Providing a clean, quiet home is about the only thing, Harrington says, that maintains her sense of stability.

But that’s meant paying more in rent than what she can afford. Thousands of low-income working families in Nashville share that plight. While about one-third of homeowners pay more for their mortgage than they can afford, renters, who typically make less money, have a much tougher time. Almost half, 48 percent, of renters in Nashville are considered cost-burdened, meaning more than 30 percent of their income goes toward housing.

In its 2010 State of the Nation’s Housing Report, Harvard’s Joint Center for Housing Studies reported that close to 5 million more households in the U.S. are cost-burdened than were in 2001. One in four renters is now classified as severely cost-burdened, meaning she is spending more than 50 percent of her income on rent.

Between 2000 and 2007, an initiative under Mayor Bill Purcell added about 26,000 affordable housing units to the city’s stock. But with the recession, progress slowed, and the gap
between what’s needed and what’s being built is widening.

According to the U.S. Department of Housing and Urban Development (HUD), the South has the highest number of cost-burdened renters. Many are low-income single parents, like Harrington.

Susan Saegert admits she’s a little “obsessed” with the complex web of issues that falls under the term affordable housing. In her office at Vanderbilt’s Peabody College, stacks of books chronicle the country’s lack of safe, inexpensive places to live. Saegert, a professor of human and organizational development, has studied the issue for 25 years.

“Ever since I started following affordable housing, there’s been a crisis,” she says. “It can get depressing.”

Now the demand for low-income rental housing is especially high. HUD’s definition of a low-income household is one bringing in 50 percent of the median income. In Nashville, that’s about $28,000 per year. According to the Department of Social Services’ 2010 Community Needs Evaluation, 28,599 families in Davidson County earned less than $25,000 in 2009. That same year, 13,467 families earned less than $15,000 — below the federal minimum wage.

Saegert worries particularly about that group, along with the retail clerks, waiters and service industry workers who tend to scrape by.

“The lowest sector of our population is growing,” she says. “We’ve become an increasingly service-based economy, with suburbs attracting middle and upper households.” In a bad economy, it’s typically the working poor who get hit the hardest, with cuts to either their jobs or wages.”

Harrington, a certified nursing assistant, watched her hours working at a hospice evaporate in the past few years. With young children and a father dying of cancer, she saw her patient load drop significantly. She couldn’t secure enough other work and last year was pocketing less than $900 a month. Bills and rent went unpaid. Sure enough, her landlord slipped an eviction notice under her door in September. Mariah was 6 months old. Her second youngest, Rosilyn, was barely 2, and Kanacia and Lyric were 11 and 13, respectively. Fear gripped her. She drove around East Nashville in her Chevrolet Suburban hunting for rentals. It didn’t go well.

In 2010, the fair market rent for a two-bedroom apartment in Nashville was $807, up from $761 in 2009 and $693 in 2007. A family of three earning $32,280 a year could afford that $807 rent (plus utilities) without spending more than 30 percent of their income. That’s 176 percent above the federal poverty level for a family of that size. Harrington’s family totaled five, and at the time of her eviction, she was bringing in a little more than $10,000 a year.

There were the public housing or Section 8 voucher routes. The Metropolitan Development and Housing Agency operates both programs. But they demand patience, as waiting lists are often prohibitively long. Harrington wasn’t interested. There are typically a couple hundred units available for less than the fair market rent of $800 — some as low as $450. But Harrington faced a lot more competition for those low rents than just a few years ago. Foreclosures and the economy have led many to seek cheap rent. HUD reports that higher-income individuals looking for deals occupy 42 percent of the apartments that someone in Harrington’s situation could afford.

Broader housing trends are also pushing down the amount of affordable stock. Harvard’s Joint Center for Housing Studies estimates that every year, the U.S. loses 200,000 affordable apartments. That’s largely due to an emphasis on turning old, inner-city buildings into luxury condos, coupled with a focus on mixed-income neighborhoods rather than strictly low-income housing.

Saegert points to the recent HOPE VI developments in Nashville. The program allowed MDHA to match federal with private dollars to tear down and rebuild housing projects. The colorful, tidy neighborhoods are open to those of varied income levels. They make for attractive diversity, and they’ve led to major drops in crime and other ills associated with high-poverty clusters.

But 45 percent of public-housing residents were ultimately displaced by the HOPE VI redevelopments, which did not guarantee one-to-one replacement for those already in public housing. MDHA offered to help relocate 700 residents to other rentals. Vacancies at affordable housing complexes are always sparse, and the crowding of this particular market became even worse.

Harrington’s search for available apartments took a few days. She found a couple places for around $600 a month. But unpaid medical bills had destroyed her credit, and landlords turned her down. Soon she was visiting places that were bad to the point of cliché: roaches, unidentified red spots on the carpet.

The city’s recent Community Needs Evaluation showed 74 percent of low-income households were paying too much, living in substandard conditions (like no working bathroom), or dealing with overcrowding. With no success finding an affordable, clean place with a landlord who could look past her credit, Harrington and the girls moved in with relatives for two weeks.

Why was Harrington’s search so difficult? Of Nashville’s 103,000 renter-occupied units, local affordable housing experts estimate up to 30 percent meet HUD’s definition of a low-income person — making less than $28,000 annually. That includes public housing and Section 8. That ratio isn’t bad. Other cities have it much worse. Still, for Harrington and others whose income is drastically less, the supply of housing is small.

It’s not that no one wants to build them. It’s just a difficult financial prospect. Chances are, if a developer is trying to build affordable housing, he or she is applying for federal low-income housing tax credits made available by the IRS and administered by the Tennessee Housing Development Agency. The Low-
Income Housing Tax Credit Program acts as an incentive to invest in affordable housing, wherein private banks purchase credits to offset the expense of building new units, which in turn allows developers to push down rents.

First, developers must commit to reserving a portion of their units to those making 50 to 60 percent of the median income. That’s the population the tax credit program targets, workers pocketing a couple thousand dollars a month. Once credits have been awarded, developers turn around and sell them to investors to raise capital for their projects. This reduces the amount the developer would otherwise have to borrow, and less debt can mean cheaper rents. Investors walk away with a dollar-for-dollar credit against their federal tax liability each year for 10 years.

In 2009, with the economic downturn, investors weren’t interested in the credits. Without that money, development temporarily froze. So the federal government stepped in as an investor and began buying up the credits, then providing financing for projects to proceed. But the stimulus money is gone. Developers are crossing their fingers that investors are once again hungry for credits. If not, new affordable housing construction will grind to a halt. And tax credits aren’t plentiful.

The agency typically receives 70 to 80 applications a year. In the last few years, there have been enough credits to approve anywhere from 12 to 32 proposed projects for the entire state.

“You have to have free money to drive rents down,” says Cathie Dodd, executive director of Woodbine Community Organization, a nonprofit that works to preserve and create housing for the working poor.

She estimates it could cost $80,000 to $100,000 to build a single housing unit — just the bricks and sticks, land not included. With the help of the tax credit, she can get her rent down to $500 or $600 and still pay off the debt she owes on the property. While she may want to offer a family $350 rent, that would put her organization at risk.

“Even a nonprofit serves to make a profit,” Dodd says. “We can’t serve you tomorrow if we have no money today.” So those trying to offer very low rents are left scrambling for other ways to lower their debt.

Rusty Lawrence scrambles. The director of Urban Housing Solutions, a provider of affordable and low-income, supportive housing, uses several federal programs that underwrite rehabilitation of dilapidated housing so long as the structures are turned into affordable units. As a nonprofit housing organization, Urban Housing Solutions also qualifies for a state low-interest loan, which helps cut the cost of purchasing properties.

Even with the financial layering, there’s not enough money out there for developers to pull rents down in great enough quantity. According to Lawrence, it costs $275 per month to operate a unit. That takes care of taxes, maintenance, insurance, etc. Add a mortgage payment and a touch more to put in
reserves for emergencies like a busted water heater, and you’ve got a $400 rent.

Some help arrived in 2009, when Nashville secured a $30 million federal Neighborhood Stabilization Program grant. The money is being spent on foreclosed properties, allowing Woodbine, Urban Housing and two other agencies to put as many as 500 new units on the market. But rents at many of the units will fall between $500 and $700, still high for the bottom tier of working poor. That gap between what’s needed and what’s being built upsets affordable housing advocates.

“There’s not an effort being made to take care of the really poor people in Nashville,” says Tracey McCartney, director of the Tennessee Fair Housing Council. She says the tax credit program yields housing within reach for teachers or firefighters, not the service industry workers making barely above minimum wage.

“The tax-credit properties are good, but they’re politically palatable. The subsidized housing for the really poor people isn’t,” she says.

That’s why advocates are pushing for a local affordable housing trust fund, a pool of money with a dedicated source of funding that would go directly toward the construction and maintenance of subsidized housing. The idea came about in the early 1980s, but has gained great momentum in the past decade with the number of funds doubling in the last seven years. More than 600 cities and counties across the U.S. have housing trust funds, as do 40 states, including Tennessee. Together they generate $1.6 billion a year for critical housing needs.

The creation of city housing trust funds tends to incite the most pushback, due to tight budgets and neighborhoods worried about the social effects of more low-income housing. Most cities use developer fees as their source of dedicated revenue. The most common funding source for state trust funds is the real estate transfer tax. Cities such as Louisville, Indianapolis, Portland and Knoxville have their own trust funds.

A National Housing Trust Fund was authorized in 2008 but is not currently funded. (Just a few weeks ago, President Obama urged Congress to find a revenue stream that could boost rental housing for
extremely low-income families.)

“We know that you cannot build housing for poor folks without a subsidy,” says Bill Barnes.

Barnes is a former Methodist pastor who’s been working on housing issues for decades. In 2008, he presented a plan to newly elected Mayor Karl Dean to dedicate a constant source of revenue to the construction of affordable housing. Other cities tie their trust funds to local fees and taxes associated with real estate. But the plan never got off the ground. Janel Lacy, Dean’s spokeswoman, blames timing.

“The economic environment … has prevented us from moving forward on any new, aggressive programs, specifically dedicating local funding,” Lacy wrote in a statement to The City Paper.

That doesn’t settle well with Barnes.

“Is it a lack of resources or a lack of will?” he says. “We can build a convention center with millions of dollars created through creative financing.”

A group of Vanderbilt graduate students is working with Barnes to reintroduce the plan. Barnes wants to also push for inclusionary zoning, which means a portion of new construction within city limits would have to go toward affordable housing. Barnes says there’s a pervasive “not in my backyard” mentality when it comes to low-income renters. Inclusionary zoning would render any NIMBY sentiments powerless.

Affordable housing experts know in this political and economic climate, making great strides toward a better place isn’t likely. Loretta Owens, director of The Housing Fund, a nonprofit that finances low-income housing, expects that Congress will cut funding for federal housing programs.

“It will take a hit,” she says.

After the shooting at the townhouse in Madison, Harrington was exhausted. Kanacia, who woke up to bullets flying above her bed, was afraid to sleep alone. The family hunted for another place to live — again. But they’ve landed well, up a winding Bellevue hill, in apartments that could double as a ski lodge.

With the Salvation Army’s help, she can afford it. Pam Singley, Harrington’s caseworker at the Salvation Army, works with several struggling families as part of a grant-funded program to prevent homelessness. She says Harrington’s story is far too familiar: a single parent desperately trying to find a cheap place to live that isn’t dangerous or rundown.

“The places that are affordable, they don’t want to live,” she says.

Singley has Harrington on a strict budget for day care, food and bills. The Salvation Army is also helping pay a portion of her rent. The catch is this: Every month she assumes more. By fall, she’ll be on her own: $727 a month. With a new full-time job at a nearby nursing home, Harrington’s income is now $17,960 a year. Even with a larger salary, she will qualify as cost-burdened, with almost half of her income going toward the rent payment. She plans to ask for extra 12-hour shifts so she can hold onto the new apartment she adores.

“This is very comfortable for me,” she says. “I feel safe here.”

It’s a sunny Sunday, and a warm breeze blows in from Harrington’s open kitchen windows. Fourteen-year-old Lyric and 11-year-old Kanacia are playing with their cell phones, taking turns sitting in a computer desk chair, “practicing” for when their mom might be able to afford the Internet.

The two little ones wear identical Tinkerbell pajamas and matching dripping noses. Both are getting over the flu. Harrington gets up from the kitchen table to switch a load of laundry. She cherishes spending weekends with her kids. In the evenings, she’ll click on Lifetime TV, hoping to find a sappy movie. One-year-old Mariah parks herself in a pink Power Wheels Barbie Volkswagen, while 2-year-old Rosilyn splays out on a miniature princess couch. Harrington and the older girls fold into two sofas.

It’s in these tranquil moments that Harrington is happiest. Her children are safe, content. Then, occasionally, the moment flips. She’ll gaze out the window to a quiet parking lot, or at her soft beige carpet, perfect for clumsy babies, and panic hits. It’s all on her to keep this.